Money is big business for the financial industry (obviously). The people that run financial institutions such as banks know that people will always need to borrow all sorts of different amounts of money, whether it be to pay off some emergency bills, buy a car or even to move into their first home.
Many of us are taught from an early age about the benefits of saving up money to buy what we want, and the importance how borrowing money from other people isn’t a good idea, but the truth is some people just can’t afford to spend large periods of time saving up money for high-value items.
For example, if you wanted to buy a house and were only willing to pay £100,000 for it, you would have to save up around £833 a month for the next 10 years!
By the time you have amassed that amount of money, house prices may well have risen in value and so you would have to keep on saving!
This is conveniently forgetting about the fact that you would still have to pay your bills and rent for where you were living at the time, so unless you were earning about £50k a year or so, you can forget about saving up money to buy a property outright!
But putting mortgages and house buying aside, a large amount of people often borrow money via overdrafts, credit cards and unsecured loans. The problem is, many of those folks either borrow above their means, or they have too much in the way of borrowing that is virtually unmanageable.
Here are some expert tips to help you take control of your debts so that you can get them paid off quicker:
Find out what you are spending
This might sound obvious to you, but if you don’t know what you are spending each month you can accumulate a lot of debt; especially if you have spent all of your monthly income before paying all of your bills off first!
Www.payday-choice.com advises that you log into your online account service provided to you by your bank and making a note of all of your monthly income and expenditure details. You can either write it down on paper or use a spreadsheet program on your computer.
Lower your monthly outgoings
Once you know what you are paying for each month, work towards lowering the amount of items you pay for each month. Some people pay for subscriptions to satellite television or mobile phone contracts, for these types of bills you should either negotiate better rates or cancel them altogether if you don’t need them.
Pay off high interest borrowing first
If you are unsure of what to pay off first, the answer is simple: the debt that charges the highest amount of interest! Credit cards with extremely high interest rates are compounded each month, so you are literally just paying interest on interest and hardly anything off your original balance if you are only paying the minimum amount, for example.